![]() The expansion of the reporting rule is the result of a provision in the American Rescue Plan, which was signed into law earlier this year. Prior to this change, app providers only had to send the IRS a Form 1099-K if an individual account had at least 200 business transactions in a year and if those transactions combined resulted in gross payments of at least $20,000. ![]() A business transaction is defined as payment for a good or service. Payment app providers will have to start reporting to the IRS a user’s business transactions if, in aggregate, they total $600 or more for the year. If you’re among the millions of people who use payment apps like PayPal, Venmo, Square, and other third-party electronic payment networks, you could be affected by a tax reporting change that goes into effect in January.
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